The idea of what makes a good rental keeps evolving. Just a few years ago, the ideal rental for your average tenant would mainly prioritize space, location, or modern amenities. However, the conversation is very different nowadays. As the cost of living increases, it influences almost every decision people make, and that definitely includes renting too.
Thus, as a landlord, you need to understand the new rental reality, as well as how rising costs are changing things for your soon-to-be tenants. Continue reading below as we discuss with Bay Property Management Group Philadelphia on how to adapt your leasing strategy to ensure long-term stability in your rental.
Affordability as a Growing Concern
Now, affordability is fast becoming one of the biggest challenges your tenants will face in the rental world today. The truth is, in many areas, the rent is skyrocketing much faster than your average prospective tenant earns. In addition, inflation has made everything from transportation to even basic groceries more expensive, so it’s becoming more difficult for your renters to keep up with rising housing costs without sacrificing their other financial priorities.
As a result, lots of people are becoming very selective when choosing a rental. Thus, instead of stretching their budgets to secure something super sophisticated, they’re simply looking for rentals that’ll give them enough room to comfortably cover other monthly expenses.
Changing Definition of Home for Renters
Prioritizing Affordability
To be fair, rising costs are changing rental housing by altering what tenants prioritize now when searching for a new home. As we mentioned before, affordability is now the number one priority. For instance, instead of your tenants asking if your property has every feature they want, they’ll ask whether they can comfortably afford it in the long run.
At the same time, that also means your renters are paying closer attention to things that’ll reduce their ongoing expenses. Stuff like energy-efficient appliances, included utilities, or lower maintenance costs are usually more appealing than high-end finishes that simply increase rent.
Location Preferences
Location is still super important. But nowadays, renters are starting to prefer the more affordable and convenient options rather than the most desirable neighborhoods. For example, some tenants could move to less urban areas because the rent is lower, or they could choose neighbourhoods that give them easy access to services like public transport, schools, healthcare, or shopping. Also, this creates the perfect opportunity to position your rental as a more practical choice because of the benefits it provides instead of only focusing on location.
Shared Living Arrangements
Yet another noticeable trend is shared living. We all know that housing costs keep rising, so a lot of people are living with roommates or family members to make paying rent more manageable. Thus, people are leaning more towards properties with lots of bedrooms or flexible living spaces. That’s why if your rental can handle shared occupancy, you just might be better equipped to bring in more tenants.
How Should Landlords Balance Rent Increases with Tenant Retention?
Be Strategic With Rent Increases
As a landlord, you might have to increase your rent to keep up with the rising expenses. However, the way you do this matters a lot more than you think. For instance, instead of making huge price jumps, you should make small but steady increases that’ll show the state of the market. Besides, it’s also a much better approach because it’s much easier for your tenants to manage and they’re less likely to move elsewhere.
Communicate Clearly
Obviously, none of your tenants will be ecstatic to hear that their rent is going up. However, when you communicate clearly with your tenants, you might be able to make the situation easier for them to deal with. Besides, giving your tenants plenty of notice lets them prepare their finances in advance, and it also makes you a more professional landlord.
Focus on Long-Term Tenant Value
Another thing you can do is focus on long-term tenant value. Having tenants is great, but having reliable tenants is usually more profitable for you in the long run. That’s because whenever your tenants move out, you’ll likely face advertising costs, property preparation, screening, and potential vacancies before someone new moves in.
For this reason, you’ll need to respond to maintenance requests as fast as possible, keep your property in good condition, and treat all your tenants fairly. It’s actually quite common for tenants to renew their lease when they feel they’re receiving good value and quality management from you.
Rising living costs are unfortunately the new reality for everyone, and your tenants are beginning to reevaluate what matters to them. As the rental reality evolves, you’ll be in a better position to stay competitive when you focus on your tenants’ preferences, offer fair pricing, and focus on tenant retention. If you’re able to do this, you can build stronger relationships while keeping your rental property successful in a changing market.
Please Note: I always strive to provide accurate and helpful information, but just a quick heads-up—I’m a blogger, not a doctor, lawyer, CPA, or any other kind of certified professional. I’m here to share my experiences and insights, but please make sure to use your own judgment and consult the right professionals when needed.
Also, I accept monetary compensation through affiliate links, advertising, guest posts, and sponsored partnerships on this site, however I am very particular about the products I endorse and only do so when I am truly a fan of the quality and result of the product.
